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Economics

The Dawn of Socialized Banking in America

Let us first open with the obvious, there is an exponential difference between a bail-out and a buy-in, bail-outs have been a tenant of government intercession on behalf of the capital good of major U.S. industries since nineteen hundred and seventy under Tricky Dickey, republican president Richard Nixon to the tune of 3.2 billion (cost in 2008 U.S. dollars). But our latest government foray into corporate, “here let me help you up off of that floor your face just smacked off of”, is the hum dinger of all; the 700 billion dollar mother of all bailouts, really a veiled temporary buy-in, in an effort to prevent a recession.

Well, news flash, ooops, too late, we’ve been in a recession, there I used it, the “R” word, since November of 2007. Yup, the “R” word, the “R” that comes after the big “O”; Overspending. We’ve been engaged in gross overspending, present author included, and our chickens are coming home to roost and peck and peck again on our 401Ks and frankly they are ticked off with roid rage, hopped-up on growth hormones and steroids that have caused them to appear on the world market more like their ancient cousins the raptors rather than our beloved cartoon icon Foghorn Leghorn. Oh, but we’ve had company during out spending orgy, yes I just used the word Orgy in an economics article; Japan, The European Union, The former Soviet Union, sheepishly raise your hands with eyes gazing downward, you know you were drunk with overspending for decades too, your stock markets betray your bloodshot eyes beneath dark sunglasses. Japanese salarymen have been legendary for dropping enough money to buy a halfway decent used car (or brand new Yugo) in one night of business client entertainment, and they are mere armatures when placed in the ring with some of our heavyweights over at AIG and Enron.

To put this brutally for all of you meat and potatoes carnivores out there, the question is not why 19 U.S. banks have failed as of November 2008, but why anyone would want to be a banker in the U.S. in the coming decade, for God’s sake people, offshore banking will be the wave of the future at this rate. Run. Forrest. Run! Why would you want the U.S. government telling you who you can and can’t loan money to and how much risk you can incur in said transactions, when you can set up shop in oh, say the Cayman Islands and bank, oversight free, in your Bermuda shorts and flip flops. George Orwell stand up and take a bow, go ahead, toot your own horn from beyond the grave you warned us this was coming some thirty years before I was in footy pajamas and thought Battlestar Galactica and Buck Rodgers were the coming future.

If I’m sounding to you a bit unpatriotic, backhand yourself about the cheek and don’t even go there. It is every American citizen’s right to encourage and embellish upon the work of our founding fathers, the first patriots of the American system of government, a system predicated solidly upon checks and balances. Those old white guys in powdered wigs and white calf stockings really knew their stuff, they knew their history, no Caesars or Kings for us, they created a political cage match for us called the House, Senate and Executive Branch, so that we would be guaranteed freedom from tyranny. Much like socialized medicine, socialized banking frightens off those worth their salt, who frankly appreciate compensation based on merit and risk, not government oversight.

What we need is a social change in spending among the American people and their government, not socialism. A gross alteration of spending behavior. We’re going to have to do without some luxuries for a time during the “Great Recession of Twenty ‘O Nine”. Once again I ask you to backhand yourself about the cheek, this is not a depression, 24.9% unemployment, now that’s a depression. Checks and balances people, checks and balances. Have faith, the guys in wigs knew what they were doing, it’s only when we get away from their original blueprint of government that we get ourselves in trouble.

Post depression era, our grandparents were thrilled to have a car and a decent house and maybe a little nest egg saved up so that their kids could, dare to dream, go to a good college and attain a better life. Now you’re nobody, or so we’re told, if you can’t vacation at club med and sit on a lounge chair next to Martha frekin’ Stewart while checking your stock portfolio on your Blackberry while sipping a low-cal margarita. Sorry Martha, just using you to illustrate a point.

Now for the good news, socialized banking won’t work, we’re Americans; no offence Canada, with your 1993 International Award for Excellence winning socialized medicine program; but we invented the ‘Rebel Without a Cause”, the leather jacket, the Harley Davidson, we resist anyone and anything that smacks of King George III. I’m neither left-wing, nor right-wing, like my hero General George Washington, this Dodo bird don’t fly, we get nervous when things go to extremes. We’re Americans, we will unlearn our poor spending habits and by God we will listen to our elders who lived through the great depression and this time we will listen well and this time we will learn. Our failure has been in forgetting that savings and fiscal responsibility are not luxuries like a Lexus or a Platinum Visa, they’re a necessity. Socialism in America? In the home of the Big Whopper? What are you kidding me? Here’s a new buzz word for the 21st century…Frugality. Look it up on Wikipedia, it’s the exact, I’m talking verbatim here, economic formula for how we get out of this economic mess.

Don’t give up on your America, George, I’m reading my American history and reading your original words of wisdom to a new nation that you wrote and delivered at Federal Hall on Wall Street (hmmm Wall Street) as our first sitting president in 1789. I’m listening George, I’m listening well, and thank you President Washington for helping to form a nation where I can write such words as I have written here, free from the fear and tyranny Mr. Orwell warned us of, it is in your honor that such words are written in a sometimes humorous, yet respectfully thoughtful manner, as a patriotic citizen of The United States of America.

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America cashed in on its noble laws for the social equality of opportunity. Capitalistic endeavors took purpose of those laws without the social responsibility through which they were endowed. And, after the fact is already patent, they continue to act with the same disregard when they make false promises so as to cause legislative action that may otherwise be used to better suit their interests and not those of the public (the bailout). It is clear that this was the mother of all temptations – to mislead the public that it was ok to borrow under laws so poorly defined that their purpose was taken out of context. Now those responsible wash their hands and show that their abuse is not complete without further twist of words. You are correct to worry, for our forefathers provided a structure where ideas met with words were brought to reality by the brave will of free men. But where the executive sentinel of the masses lay asleep enamoured by the poisons provided through the empowerment of those not accountable by our judicial system, the results are the misguided efforts of a naive legislature befriended by the evil that provided the anvil which forged the means for the respective positions of power they occupy. That will continue to be the case even if we learn the lessons you refer to, because the problem was not that we do not know how to be frugal – we were told we no longer had to be and were not provided the transparency necessary to challenge those conceptions. We trusted those who were ‘blessed’ by the executive, the legislature, and the judicial to say so.

Originally posted by Dr. Euribiades Cerrud II, Esq., on 11/16/2008 at 14:32

Mr. Jefferson,

You have a very witty and entertaining writing style. Additionally, I thought you made some very clear points.

I, unfortunately, disagree – at least for the moment – that the United States has learned its lesson. First, Congress is already lashing out at banks who received bailout money and are not lending it freely enough to citizens. The mortgage crisis was precipitated in part by a near Congressional mandate that banks loan money to those who could not afford houses, under the guise of making the ‘American dream’ available to all Americans. Second, Obama’s campaign promises are fraught with tremendous new expenditures. Social Security and Medicare make up 42% of the budget. Almost 10% of the budget is spent on interest for the national debt! If Obama’s programs are enacted as discussed in the campaign, the United States will see massive new spending – exactly counter to your wise recommendation for frugality.

Moreover, once you give an American an ‘entitlement’, it is virtual political suicide to repeal all or even a part of it. I grant that time will tell if Obama shows restraint, but I am uneasy about it.

In any case, great article and thanks for taking the time to submit it!

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